FACTORS AFFECTING TRUST IN SUPPLY CHAIN COMMITMENT

Abstract

Trust is one of the most important aspects in successful supply chain relationship that encourages commitment in the relationship. A supply chain relationship which lacks of trust and commitment may affect the performance of partners which in turn results in high-cost or even loss of current suppliers or customers. This research's objective is to measure the factors that affect level of trust and the impact of trust on supply chain commitment in Electronic Distribution business in Bangladesh. To measure the factors affecting trust and the impact of trust on commitment, items were adapted from the study conducted by Kwon and Suh (2004). Data were collected from 54 managers, branch managers and managing directors of electronic distribution business in Chattogram. Convenience sampling technique was used to select respondents. The results indicate that a firm’s trust in its supply chain partner is highly associated partner’s specific asset investments (positively) and behavioral uncertainty (negatively). It is also found that information sharing reduces the level of behavioral uncertainty, which, in turn, improves the level of trust. A partner’s reputation in the market has a positive impact on the trust-building process, whereas a partner’s perceived conflict creates a negative impact on trust. Finally, the level of commitment is strongly related to the level of trust. Managerial implications, limitations and
further research directions are also discussed.